Canadian Solar warns UK to keep renewable energy incentives

Canadian Solar, a North American producer of solar panels which aims to be the
next to enter the UK market, has joined a growing number of companies
warning the Government not to tamper with incentives or risk losing green
investment.

The Nasdaq-listed company, which is based in Canada and has the majority of its operations in China, is the latest to respond to the incentives that are driving the growth of the fledgling British industry.

Known as feed-in tariffs and introduced in April last year, the incentives guarantee above-market rates for power produced from a range of renewable energy, including solar.

“We expect to have our feet on the ground there this year,” said Gregory Spanoudakis, who runs Canadian Solar’s European operations.

“The UK has taken the right approach as long as they don’t start fiddling.”

Britain saw a record volume of solar installations in 2010, as companies took advantage of the Government’s move.

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The trend is set to continue this year. Conergy, a German solar-panel maker and installer, announced plans last week to open an operation in the UK. However, the industry has been unsettled by the Coalition’s plan to review the scale of the incentives if solar installations beat initial targets.

The generosity of the incentives partly depends on whether the solar panels are installed on old or new buildings.

While the incentives are not designed to be permanent, industry observers say that it is critical to keep the confidence of those who have or are considering entering the market.

“Until April last year there was essentially very little solar activity in the UK,” said Daniel Guttmann, who is director of renewables at PricewaterhouseCoopers. “Investors don’t want constantly changing decisions.”

Despite the installation of solar panels with the capacity to generate more than 42MW of electricity last year, the UK’s industry is dwarfed by Germany. Last year installations in Germany, the most developed market in the world, are estimated to have been up to 8,000MW.

Critics of the industry argue that the need for such incentives raises doubts over the economics of solar power in the UK. Solar energy produced from photovoltaic panels only represents about 0.3pc of the UK’s renewable energy.

But despite the unease over possible changes to the incentives, those that have entered say they’re convinced of the potential of the market here.

“There’s been quite a lot of discussion [over tariffs],” said Amiram Roth-Deblon, head of business development at German renewables company Juwi. “But I would rank the UK as a class A market.”

Juwi opened an office in Birmingham last November and plans further expansion.